Super stories: who is calling Dr Cullen to account?

“If compulsion was to be introduced (to KiwiSaver) we would have to think about income testing New Zealand Super. That was just an awful phase in New Zealand’s history.” Michael Cullen

FACT:

• NZ Super is income tested now:

NZ Super is fully taxable, and the tax is progressive.
KiwiSaver-type pensions paid for while working overseas are counted against NZ Super.

• All those whose spouses have a KiwiSaver-type overseas pension have it counted against their NZ Super.

·“It is a fundamental principle that people should receive the same state-funded retirement income regardless of their personal income or circumstances.” Michael Cullen

FACT:

• Many New Zealand politicians receive a state-funded pension on top of their NZ Super.

·“It would be unfair if people who split their working lives over two countries got two state pensions.” Michael Cullen

FACT:

• Every other Western nation allows its citizens to keep pensions paid for in different countries:
  
• Overseas “state” pensions are funded not by the state but from personal contributions.


• Overseas pensions cover only the limited period a person worked overseas.

·“Claims that many New Zealanders have two state pensions are not correct.” Michael Cullen

FACT:

• Dual entitlement pensioners receive two state pensions - UK National Insurance and NZ Super - in full.

· “Under the terms of section 70 (of the Social Security Act 1964), pensions arising from compulsory overseas social security schemes are deducted from the amount of New Zealand (Superannuation) payments.” Michael Cullen

FACT:

• The Act makes no mention of - let alone distinction between - compulsory and voluntary payments.

· “Pensions arising from voluntary schemes do not fit the criteria in section 70. Such pensions are therefore not deducted from New Zealand social security payments.” Michael Cullen

FACT:

• NZ Super is regularly deducted from people who voluntarily paid more than was required in schemes administered by the governments of such countries as Germany, Switzerland, Austria, the United Kingdom and the United States.

ENDS

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